SBI reports Q4 profit of Rs 838 crore, NPAs decline

State Bank of India (SBI) on Friday reported standalone net profit at Rs 838.4 crore for the March quarter of the financial year 2018-19 (FY19). The state-owned lender had posted a loss of Rs 7,711.17 crore in the year-ago period. Net interest income (NII) during the quarter came in at Rs 22,954 crore, up 15 per cent on year-on-year (YoY) basis.

Basic EPS (earnings per share) stood at Rs 0.94 against Rs 4.43 in the December quarter. Analysts had expected SBI to post a net profit of around Rs 3,900 crore, up 0.3 per cent on a sequential basis.

Gross slippages during the quarter under review stood at Rs 7,961 crore. Phillip Capital saw slippages around Rs 10,000 crore in the recently concluded quarter and expected strong recoveries from power sector accounts. “Slippages will mainly come from watch list… Containment of slippages and strong recovery from power sector NPA is likely to improve gross/net NPA (GNPA/NNPA),” said a Phillip Capital result preview note. READ PREVIEW HERE

Gross NPAs declined to 7.53 per cent against 8.71 per cent in the previous quarter and 10.91 per cent in the corresponding quarter of the previous fiscal. Net NPAs during the period came in at 3.01 per cent against 3.95 per cent in the previous quarter and 5.73 per cent in the year-ago quarter. 

Provisions rise

The bank has made a provision of Rs 16,502 crore during the quarter ended March 31, 2019 as compared to Rs 6,006 crore in the December 2018 quarter on a standalone basis. For the fulll year ended March 2019, the state-owned bank has made a provision of Rs 53,828 crore as against Rs 75,039 crore in the previous corresponding period.

MCLR cut

The Bank has reduced its marginal cost of lending rate (MCLR) by 5 basis points (bps) across all tenors with 1-year MCLR coming down from 8.50 per cent per annum (p.a.) to 8.45 per cent p.a. 

As a result, interest rates on all loans linked to MCLR stand reduced by 5 bps with effect from May 10, 2019. This is the second rate cut in one month. After the April Monetary Policy the MCLR was reduced by 5 bps. With today’s MCLR cut, the reduction in the Home Loan Rates since April 10th 2019 till date is 15 bps.

"With SBI having linked its CC/OD rates above Rs. 1 lac to the repo rate for better transmission of RBI’s policy rates, the benefit of reduction in repo rate by 25 bps by RBI w.e.f. 4th April 2019 will get passed on in its entirety to such CC/OD customers banking with SBI w.e.f 1st May 2019," the bank said in a statement.